Highgate Hotels CEO Arash Azarbarzin said he doesn't believe his company's commitment to environmental, social and governance issues is new or trendy, but what is new is the company's commitment to publicly disclose the results of those efforts.
Today the hotel investment and management company released its first environmental, social and governance report, which company officials hailed as being among the first of its kind for the hotel industry management companies.
Highlights of the report — which was compiled based on 2022 data — include significant drops in greenhouse gas emissions since before the pandemic and a 170,000-megawatt-hour drop in energy use. Highgate's Alohilani Resort Waikiki Beach has partnered with the Hawaiian Legacy Reforestation Initiative, a major reforestation initiative in Hawaii with a goal of planting more than 550,000 native and endemic trees. So far, the project has already took part in the reforestation of 1,200 acres. Highgate has planted more than 14,000 trees in total across its participation in reforestation efforts.
Highgate has more than 500 hotels in its portfolio and aims to have 200 hotels powered by renewable energy sources. The company is the first hospitality firm to sign on to the Clean Energy Buyers Association's Commercial Real Estate Principals.
Beyond the environmental aspects of ESG, Highgate has also established a Corporate Highgate Inclusion Council to promote diversity and inclusivity among its workforce, and the Highgate Charitable Foundation has raised more than $7.5 million.
Speaking to Hotel News Now via an email interview, Azarbarzin outlined how and why Highgate has leaned in to being a leader in ESG.
What has spurred Highgate to pursue and track ESG initiatives across the business?
Though we’re publishing our first ESG report now, focusing on ESG initiatives has been a part of Highgate’s DNA internally for decades. We’re constantly looking at every area of the business where we can add value, and we took the next step in our commitment to ESG by adding Marianne Balfe, vice president of sustainability, to our team over two years ago.
Are stakeholders — i.e. owners, brands, investors — pushing for progress and accountability around ESG?
Yes, ESG has become a bigger part of the hospitality ecosystem in general, but even above and beyond that aspect, we have found that our customers’ decisions are being driven by how we perform within the realms of sustainability and other ESG initiatives. In [requests for proposal] from corporate clients and group business customers, we are seeing an uptick in inquiries about ESG programs and commitments.
How will the thinking around ESG play into Highgate’s business going forward?
Prioritizing ESG has become the way we do business. It plays an integral role in the way we operate every hotel within our portfolio every single day, and this starts with educating our team members. From the top down, our teams are aware that this is woven into the fabric of our company and is how we operate.
How do you carry the lessons learned from different ESG initiatives across different types of hotels since the Highgate portfolio runs the gamut?
We have the privilege of learning from many of the big hotel brands — including Marriott, Hilton, Hyatt, Intercontinental and Wyndham — as we manage for these companies and their brands. When it comes to prioritizing sustainability and caring for our associates, these core initiatives are pillars in our business, so they are easily translated into every hotel and department within the Highgate organization regardless of size, location or team.
What are you hoping to report about your ESG efforts one, five or 10 years from now?
We look forward to reporting annually on progress against our goals to increase electric vehicle charging station installations, biodiversity protection efforts (e.g. tree plantings), Highgate Charitable Foundation philanthropic endeavors, regional Highgate Inclusion Council representation, and to increase the number of hotels with: third-party green certifications; best-in-industry energy, water and waste performance metrics; 100% LED lighting; smart thermostats; and 100% associate completion of unconscious bias and human trafficking awareness trainings. Highgate has many exceptional hotels with remarkable and unique ESG accomplishments and ambitions, and we look forward to telling more of their stories through property features over the next five to 10 years.
We are proud to provide visibility into all relevant carbon emissions reporting categories in our inaugural report. Like many other companies, in the coming years we seek to transition our supply chain carbon emissions reporting from spend-based estimates to actual emissions data from suppliers.
Within the next year, we also hope to report progress in our people-related ESG efforts as it relates to talent retention and engagement, skill-building and upskilling, workforce diversity, employee empowerment and more.
We will continue to amplify our impact every year and focus on striving to be the best possible corporate citizen on this unrivaled and extraordinary planet.
How do you internally hold yourselves accountable to your stated goals?
Throughout our platform, we have set achievable goals for each of our hotels that challenge our leadership teams and reward them for their successes. These incentive plans have been created to celebrate our team’s progress while motivating and inspiring teams to keep working toward these goals.
The report outlines Highgate’s efforts around environmental objectives and around supporting the people within the organization. Where and how do those two things intersect?
At Highgate, we aim to create and foster better environments. That extends to both working toward a healthier planet as well as cultivating work environments where our people feel taken care of. All of these efforts begin with educating every team member on how we can listen, adapt and improve. Our People First approach to leadership fosters an optimal work environment for our associates that prioritizes equity and inclusion at every level. We have also just begun rolling out our Opening Doors Together Program, crafted by our Highgate Inclusion Council, to hold everyone accountable to our DEI goals.
There is a lot of talk about greenwashing, i.e. companies putting more emphasis on marketing ESG efforts than delivering real results. How does Highgate safeguard against that, and what do you think hotel companies have to do to move past talking about ESG to make sure they are making a meaningful difference?
Evolving our company culture and the way we operate has better positioned us to make a meaningful difference. Part of this is holding our teams accountable to our Sustainability Standards and setting those achievable goals. In order for us to be successful, we need our associates and leaders to be on board and working toward those goals with us.
Would you say ESG efforts are or will be a key differentiator for your business going forward? If so, how do you expect it to benefit Highgate from a business perspective?
Absolutely, and we are already seeing this in terms of demands from our customers. During my time working with 1 Hotels, I learned that you build strong customer loyalty by taking care of the environment. When your brand is making a difference and striving to make a positive impact, you are not only helping people and the planet, but your ROI as well. When performed genuinely, these efforts lead to more key business and relationship building because guests will be happier and will return to your hotels more often.
As one of the first hospitality management companies to publish an ESG report, our goal is to bring attention to ESG efforts and hopefully inspire other companies within our industry to follow suit and shift their businesses in the way we have and will continue to do. There are times when you keep things quiet and internal as a competitive advantage and then there are other times when you share your best practices. In this case, it is about spreading the word because we want the world to continue to evolve in this direction with us and build upon the positive impact that we’re collectively making.
Corrected on May 18 to amend Highgate's status as the first hotel management company to release an ESG report. Corrected on May 19 to clarify the Alohilani Resort Waikiki Beach's participation with the Hawaii Legacy Reforestation Initiative's reforestation efforts in the third paragraph and its renewable energy goals in the fourth paragraph.